Handling the headlines: how should food and drink producers deal with a product recall?

The announcement that there has been a second recall of cheese products following the tragic death of a child following an outbreak of E-Coli, has hit the headlines.

Food Standards Scotland have requested that the producer, Lanarkshire base Errington Cheese, carry out a "precautionary recall" of a further batch as it "may contain shiga toxin producing E-Coli".

Having to make a public recall on products is probably the most feared scenario of any food or drink manufacturer, given the high profile which it is likely to create and the risk to public goodwill. But a properly co-ordinated recall, carried out in a professional manner, may be turned into a PR benefit by emphasising the concern which the manufacture has to ensure consumer safety by taking immediate and far-reaching steps to recall products which may pose a risk to consumers.

The need to act quickly is, of course, paramount where, as in this case, there is a significant health risk.

Are you prepared to recall?

For even the smallest food or drink manufacturer, it is essential that they put in place an appropriate policy to work out what to do if they are required to recall a product for whatever reason; and given the huge costs which would be involved in this, it is also sensible for them to take out appropriate insurance covering this risk. Their goods may have been sold on to a third party – a distributer, retailer, or even the end consumer – but wherever the product may have reached in the food chain, every person involved will have assumed, and in any event it is implied, that the product is fit for human consumption.

Taking the step of recalling the product, whatever the cost, is likely to be less costly than any claim for damages from a consumer who is injured or made unwell by a product; and the resultant damage to consumer confidence and brand goodwill which may have longer term effects.

For example, the horse meat scandal not only put consumers off meat products while it was going on, but had an ongoing effect on their eating habits.

Not all product recalls make the news

While the public health risk and the tragic death of a child from the initial outbreak of E-Coli justifies this being a major news story, such recalls are much more common than you might think. Recent examples over the past few months reported on the website of the Food Standards Agency include:

the Co-operative, Asda and Sainsbury's all recalling certain ranges of Camembert due to possible presence of listeria;

Mars recalling chocolate bars worldwide after a bit of plastic was found in a product;

Suma recalling sesame seeds because of salmonella in the seeds;

Morrison supermarkets recalling its Busy Bee Cake due to possible presence of salmonella;

Asda recalling a pasta salad product due to the presence of salmonella.

With the exception of the Mars' recall, none of the others listed on the Food Standards Agency's website has hit the national headlines. As long as the public believes that manufactures have a proper and effective policy in place and will follow it, the risk of damage to goodwill appears therefore to be limited. But the actual cost of having to carry out the recall can be huge.

What should food & drink producers do?

The message to food and drink producers is clear:

have a product recall policy in place ready to implement. You never know when you might need it and it is too late and too important to make it up as you go along;

take out appropriate insurance for the cost of recall; and

take care to ensure that there are appropriate provisions in your contracts with suppliers and in particular sub-contractors to ensure an appropriate remedy against them were the fault is not necessarily your own.

With these elements covered off, the risk of harm to, and a claim arising from, a consumer and, perhaps more importantly, the risk of irreparable damage to goodwill and brand value, can be minimised.

Get in touch

Scott Kerr is Head of Harper Macleod LLP’s Food and Drink Group. If you wish to discuss any of the issues raised in this article, please get in touch.

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